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Article
Publication date: 1 January 1990

Mohamed E. Ibrahim, Saad A. Metawae and Ibrahim M. Aly

In recent years, a sizeable amount of research in finance and accounting has been devoted to the issue of bond rating and bond rating changes. A major thrust of these…

Abstract

In recent years, a sizeable amount of research in finance and accounting has been devoted to the issue of bond rating and bond rating changes. A major thrust of these research efforts was to develop and test some prediction‐based models using mainly financial ratios and their trends. This paper tests the ability of statistical decomposition analysis of financial statements to predict bond rating changes. The results show that the decomposition analysis almost does not beat the a priori probability model and is no better than multiple discriminant analysis using simple financial ratios. One important piece of information for participants in debt markets is the assessment of the relative risk associated with a particular bond issue, commonly known as bond ratings. These ratings, however, are not usually fixed for the life of the issues. From time to time, the rating agencies review their ratings of the outstanding bond issues and make changes to these ratings (either upward or downward) when needed. Over the years, researchers have attempted to develop and test some prediction based models in order to predict bond ratings or bond rating changes. These prediction models have employed some variables that are assumed to reflect the rating agency decision‐making activities. Although the rating process is complicated and based mainly on judgmental considerations, Hawkins, Brown and Campbell (1983, p. 95) reported that the academic research strongly suggests that a reliable estimate of a potential bond rating or rating change can be determined by a few key financial ratios. Information theory decomposition measures have received in recent years considerable attention as a potential tool for predicting corporate events, namely corporate bankruptcy (e.g., Lev 1970; Moyer 1977; Walker, Stowe and Moriarity 1979; Booth 1983). The underlying proposition in these studies is that corporate failure, as an event, is expected to be preceded by significant changes in the company's assets and liabilities structure. Although the event of bond rating changes is different from the bankruptcy event in terms of consequences, one can still propose that a bond rating change, as a corporate event, is also expected to be preceded by some significant changes in the company's assets and liabilities structure. Therefore, the decomposition analysis may have a predictive ability in the case of bond rating changes. The purpose of this paper is to empirically test and compare the classification and predictive accuracy of the decomposition analysis with the performance of a multiple discriminant model that uses financial ratios and their trends in the context of bond rating changes.

Details

Managerial Finance, vol. 16 no. 1
Type: Research Article
ISSN: 0307-4358

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Abstract

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Kybernetes, vol. 41 no. 7/8
Type: Research Article
ISSN: 0368-492X

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Article
Publication date: 1 February 1996

Jaroslav Mackerle

Presents a review on implementing finite element methods on supercomputers, workstations and PCs and gives main trends in hardware and software developments. An appendix…

Abstract

Presents a review on implementing finite element methods on supercomputers, workstations and PCs and gives main trends in hardware and software developments. An appendix included at the end of the paper presents a bibliography on the subjects retrospectively to 1985 and approximately 1,100 references are listed.

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Engineering Computations, vol. 13 no. 1
Type: Research Article
ISSN: 0264-4401

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Article
Publication date: 13 February 2017

Fareed Shareef, Muhammad Junaid Khawaja and Toseef Azid

Since the pristine works of Schultz (1961) and Becker (1964, 1975), the concept of intergenerational transmission has constantly been in the front line of discussion among…

Abstract

Purpose

Since the pristine works of Schultz (1961) and Becker (1964, 1975), the concept of intergenerational transmission has constantly been in the front line of discussion among the social scientists to divulge the sources and channels through which diffusion of socio-economic status can take place across the generations. The purpose of this paper is to explore the intergeneration links via monetary channels through decomposition technique.

Design/methodology/approach

Using a sample of 613 households selecting through systematic sampling from Multan district (Pakistan). Making a three tier analyses, i.e. simple, sequential and double decomposition, the findings of the models support the hypothesis of the study that children of high-income parents also fall in high-income groups.

Findings

The simple decomposition analysis using education as the pathway factor reveals that parental income is pivotal in determining the education and ultimately the level of their child’s income. The sequential analysis incorporates occupation and depicts a positive association between the offspring education and occupation. In the double decomposition analysis, the direct component reveals that even among those children with the same level of education, higher parental income is linked with the better occupational achievements, whereas indirect component explains the impact of parental income on occupation via education of the children. In other words, it explains the degree to which children with higher family income acquire more education and consequently get better jobs.

Research limitations/implications

In Pakistan like the other developing countries nationwide surveys are not conducted at the government level.

Practical implications

This study is providing the guideline to the policy makers for the formulating their policies for developing and managing the human capital.

Social implications

The findings of this study are useful for reducing the inequality in the society.

Originality/value

This is an original and first time it is going to be conducted in a country like Pakistan

Details

International Journal of Social Economics, vol. 44 no. 2
Type: Research Article
ISSN: 0306-8293

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Content available
Article
Publication date: 1 August 2018

Jiandong Chen, Yinyin Wu, Chong Xu, Malin Song and Xin Liu

Non-fossil fuels are receiving increasing attention within the context of addressing global climate challenges. Based on a review of non-fossil fuel consumption in major…

Abstract

Purpose

Non-fossil fuels are receiving increasing attention within the context of addressing global climate challenges. Based on a review of non-fossil fuel consumption in major countries worldwide from 1985 to 2015, the purpose of this paper is to analyze trends for global non-fossil fuel consumption, share of fuel consumption and inequality.

Design/methodology/approach

The similarities were obtained between the logarithmic mean divisia index and the mean-rate-of-change index decomposition analysis methods, and a method was proposed for complete decomposition of the incremental Gini coefficient.

Findings

Empirical analysis showed that: global non-fossil fuel consumption accounts for a small share of the total energy consumption, but presents an increasing trend; the level of global non-fossil fuel consumption inequality is high but has gradually declined, which is mainly attributed to the concentration effect; inequality in global non-fossil fuel consumption is mainly due to the difference between nuclear power and hydropower consumption, but the contributions of nuclear power and hydropower to per capita non-fossil fuel consumption are declining; and population has the greatest influence on global non-fossil fuel consumption during the sampling period.

Originality/value

The main contribution of this study is its analysis of global non-fossil fuel consumption trends, disparities and driving factors. In addition, a general formula for complete index decomposition is proposed and the incremental Gini coefficient is wholly decomposed.

Details

Management Decision, vol. 57 no. 4
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 7 March 2016

Monique Eissens-van der Laan, Manda Broekhuis, Marjolein van Offenbeek and Kees Ahaus

Applying “modularity” principles in services is gaining in popularity. The purpose of this paper is to enrich existing service modularity theory and practice by exploring…

Abstract

Purpose

Applying “modularity” principles in services is gaining in popularity. The purpose of this paper is to enrich existing service modularity theory and practice by exploring how services are being decomposed and how the modularization aim and the routineness of the service(s) involved may link to different decomposition logics. The authors argue that these are fundamental questions that have barely been addressed.

Design/methodology/approach

The authors first built a theoretical framework of decomposition steps and the design choices involved that distinguished six decomposition logics. The authors conducted a systematic literature search that generated 18 empirical articles describing 16 service modularity cases. The authors analysed these cases in terms of decomposition logic and two main contingencies: modularization aim and service routineness.

Findings

Only three of the 18 articles explicitly addressed the service decomposition by reflecting on the underlying design choices. By unravelling the decomposition in each case, the authors were able to identify the decomposition logic and found four of the six theoretically derived logics: single-level process oriented; single-level outcome oriented; multilevel outcome oriented; and multilevel combined orientation. Although the authors did not find a direct relationship between the modularization aim and the decomposition logic, the authors did find that single-level decomposition logics seem to be mainly applied in non-routine service offerings whereas the multilevel ones are mainly applied in routine service offerings.

Originality/value

By contributing to a common understanding of modular service decomposition and proposing a framework that explicates the design choices involved, the authors enable an enhanced application of the modularity concept in services.

Details

International Journal of Operations & Production Management, vol. 36 no. 3
Type: Research Article
ISSN: 0144-3577

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Article
Publication date: 13 June 2016

Mayank Prakash and Kshipra Jain

The purpose of this paper is threefold: first, to measure the health inequalities among malnourished children; second, to decompose the health inequalities to identify key…

Abstract

Purpose

The purpose of this paper is threefold: first, to measure the health inequalities among malnourished children; second, to decompose the health inequalities to identify key socioeconomic predictors for child malnutrition; and third, to assess the change in the proportional contribution of key predictors over time.

Design/methodology/approach

The study has used data of National Family Health Survey (NFHS) conducted in 1992-1993, 1998-1999 and 2005-2006. The information on anthropometric indicators for children below three years of age is provided; however the study is restricted to “weight-for-age,” as it is considered to be a comprehensive indicator of child nutritional status. In the first stage of analysis, health inequalities are measured among malnourished children using concentration indices (CI) for each round of NFHS. In second stage, the inequalities are decomposed to estimate the proportional contribution of socioeconomic predictors. In the third stage, change in the relative contribution of socioeconomic predictors over three rounds is assessed to suggest target-specific policies and programs.

Findings

The results highlight a slow decline of only seven percentage points in the proportion of malnourished children in India during 1992-2006. The increasing values of CIs from −0.13 (1992) to −0.18 (2006) demonstrates the concomitant rise in economic inequalities among malnourished children. The results of decomposition analysis point toward household poor economic status and mother’s illiteracy as the major contributor of inequalities during 1992-2006. During the study period, the economic status explained 50, 65 and 59 percent of inequalities, whereas mother’s illiteracy explained 40, 30 and 29 percent of inequalities, respectively. Overall, the contributors to health inequalities remained the same over time with a change in their relative contribution.

Research limitations/implications

The present study is focussed on three rounds of NFHS data conducted at different time period and so it has certain limitations which should be kept in mind while interpreting the results. The study has revealed mother’s education and economic status of the household as the major contributory factors toward child health inequalities. However, one should not forget that the level and quality of education has undergone tremendous change from 1992 to 2006 which the authors could not capture considering the availability of data in the form of years of schooling. Second, since the NFHS-1 has collected the information about the caste groups in only three categories, i.e. schedule caste, schedule tribe and others; the authors have to pool the other backward caste groups with the general caste groups. Third, the authors have used the broad classification of place of residence, i.e. rural and urban area to analyze the inequalities assuming the uniform level of development across the urban regions; however there exists huge disparities within urban areas which leave scope for further research. Fourth, though, the authors have estimated the wealth based inequalities, but NFHS does not provide the absolute level of wealth and so the authors have computed the proxy measure for wealth based on the household assets which has been extensively used in the field of research. Despite these limitations, the authors however believe that the present research work has appropriately decomposed the inequalities among malnourished children and have revealed the changes in the proportional contribution of socioeconomic factors over time.

Practical implications

The decomposition analysis brought into light that average health indicators are insufficient for determining the right approach to health intervention programs. Health policy interventions have to focus ideally on both health averages and within and between group inequalities based on varying contributions of socioeconomic determinants.

Social implications

Concentrated efforts along with the inter-sectoral concurrence, good nutrition governance, effective investment and unequal distribution of resources are pre-requisites to ameliorate the level and existing inequalities in child malnutrition in India.

Originality/value

The distinctiveness of this study can be primarily found in the use of all three rounds of NFHS data to estimate health inequalities among underweight children. The study has also decomposed the health inequalities to estimate and analyze the change in relative contribution of socioeconomic predictors for each round to facilitate the formulation of target-specific policies and programs.

Details

International Journal of Social Economics, vol. 43 no. 6
Type: Research Article
ISSN: 0306-8293

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Book part
Publication date: 28 December 2018

Claudia Sámano-Robles

This chapter examines the impact of education on income inequality in 18 Latin American countries between 2000 and 2010. This period has raised interest in the academic…

Abstract

This chapter examines the impact of education on income inequality in 18 Latin American countries between 2000 and 2010. This period has raised interest in the academic community because inequality has fallen across the region, after several years of consistent high levels. Employing the novel technique proposed by Firpo, Fortin, and Lemieux (2007), the author’s research provides a detailed decomposition of inequality. Three main findings emerge from the author’s results: First, the expansion of education increases inequality in six countries but reduces inequality in four countries. Second, the changes in returns to education are the driving component of the effects of education on inequality. Those countries where education contributes to a fall in inequality are those where the returns to education fell at the top of the income distribution. Third, the rise in the average years of education, considered alone, had an inequality-increasing effect in most of the countries under analysis.

Details

Inequality, Taxation and Intergenerational Transmission
Type: Book
ISBN: 978-1-78756-458-9

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Book part
Publication date: 27 August 2016

Yang Wang, Nora Lustig and Otavio Bartalotti

Between 1995 and 2012, the wage distribution of male workers in Brazil shifted to the right and became less dispersed. This paper attempts to identify the reasons for that…

Abstract

Between 1995 and 2012, the wage distribution of male workers in Brazil shifted to the right and became less dispersed. This paper attempts to identify the reasons for that movement in male wage distribution, focusing on the impact of education expansion on wage distribution. The Oaxaca-Blinder (OB) and Recentered Influence Function (RIF) decomposition results show that both changes in returns on skills and upgrades in the composition of work skills contribute to increases in the average wage and wages at the 10th and 50th percentiles. The shifts in returns to skills had a decreasing impact on wages at the 90th percentile and are identified as the primary force reducing wage inequality. Education expansion had an equalizing impact on wage distribution, primarily through the decline in return to education.

Details

Income Inequality Around the World
Type: Book
ISBN: 978-1-78560-943-5

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Article
Publication date: 17 September 2018

Hongtao Liu and Jin Shang

The purpose of this paper is to use an index decomposition analysis to investigate the driving forces of China’s CO2 emissions related to fixed asset investments from 2003 to 2015.

Abstract

Purpose

The purpose of this paper is to use an index decomposition analysis to investigate the driving forces of China’s CO2 emissions related to fixed asset investments from 2003 to 2015.

Design/methodology/approach

This paper uses an index decomposition analysis to investigate the driving forces of China’s CO2 emissions related to fixed asset investments from 2003 to 2015. To make policy recommendations, this paper identifies three effects. An approach to calculating energy-relevant CO2 emissions is also presented.

Findings

The results suggest that the amount of CO2 emissions related to fixed asset investments increased during the entire period. The social and economic effect played a major role in promoting carbon emissions, followed by the fixed asset effect. Therefore, the activity factor was the dominant positive factor, followed by the construction factor. The negative element was the energy effect, in which the energy intensity factor played an important role in reducing emissions, followed by the structural factor. Moreover, the carbon intensity factor might be a potential inhibitory force in reducing carbon emissions.

Research/limitations/implications

A steady financial policy, relaxed family planning, sustainable urbanization, strategy of innovation-driven development, reform of scientific and technological structures, development of science and technology and exploration of new energy sources are proposed to mitigate carbon emissions from fixed asset investments. The conclusion also provides a reference for developing countries in similar situations.

Originality/value

This paper uses an index decomposition analysis to investigate the driving forces of China’s CO2 emissions related to fixed asset investments from 2003 to 2015. To make policy recommendations, this paper identifies three effects. An approach to calculating energy-relevant CO2 emissions is also presented.

Details

International Journal of Energy Sector Management, vol. 12 no. 4
Type: Research Article
ISSN: 1750-6220

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